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Parents take hip pocket hit as childcare costs skyrocket

Childcare costs have rocketed 150 per cent in the past decade, with only electricity and tobacco prices rising at a faster rate, a new report claims.

The charges have risen so significantly that parents returning to full-time work after having a child can now expect to lose up to 60 per cent of their gross income, once private childcare fees, loss of benefits and higher income tax rates are taken into consideration.

Financial services firm AMP and the National Centre for Social and Economic Modelling (NATSEM), which compiled the research, said it means mums from low-income families who return to full-time work may take home $4.55 an hour, or about 28 per cent of their salary.

"When the time comes for parents to decide whether to return to paid work, its not only an emotional consideration, but also an important financial one," said AMP's Paul Sainsbury.

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"For some, the decision to return to the workforce may not be a choice, so it's crucial that Australian families understand the costs involved and the potential impacts of a return to work."

The report said 630,000 Australian families pay for "long day" child care, which it found can cost up to $170 a day per child.

The national average childcare fee is said to have risen 150 per cent since 2004, jumping from $30 to $75 a day for "long day" care.

The report found child care generally costs more in cities than the bush and more in wealthier suburbs than less affluent areas.

Childcare fees were found to have risen faster than petrol, education and healthcare costs.

NATSEM principal research fellow Ben Phillips said higher standards, lack of supply and Australia's "strong economy" had contributed to the rising charges.

Though the amount of children in child care has risen steadily over the past decade, about 60 per cent of children from working families are still looked after by grandparents, relatives or friends, the report said.